One-quarter of the population in Miami-Dade County, Florida, lacks health insurance, a fraction well above the national average (about one-sixth of the nation's population is without health insurance). To address the problem of financing health care for the uninsured in Miami-Dade and elsewhere, the state of Florida in 1991 passed legislation allowing local jurisdictions to impose a surtax on sales. The legislation restricted the use of the proceeds of any Miami-Dade County surtax to support the activities of the county's sole public health-care facility, Jackson Memorial Hospital (JMH). Miami-Dade County voters approved the surtax, which has helped stabilize the financially troubled hospital. In the past ten years, JMH has grown and improved financially and is a leader in treating eye disorders and pediatric patients. Recently, advocates for better access to health care by the poor, along with representatives from other not-for-profit hospitals, have suggested that surtax revenues be distributed across a wider range of institutions. But do hospitals other than JMH provide uncompensated care, and at what level? And might the greater access to surtax-funded care at JMH be causing patients to pass up facilities much nearer to their homes and travel long distances for care?
Analysts of hospital finances typically recognize two types of uncompensated care: charity care, which includes cases for which the hospital knows on admission that it is unlikely to be compensated, and bad debt, which includes cases for which payment may have been expected but none was made. The 24 general acute-care hospitals in